Beef, pork and chicken face different margin challenges - CoBank
This summer’s grilling season reinforced the uneven dynamics affecting animal protein markets, according to CoBank. Beef remains constrained by cattle availability, pork has ample supply but needs stronger domestic uptake, and chicken is expanding production into a more price-sensitive environment. Summer demand was durable, but each sector faces a different margin challenge.
Cattle availability will remain one of the beef sector’s biggest constraints. Scarce supply continues to favour cow-calf producers but raises procurement risk for feeders, packers, retailers and foodservice operators. A marginal increase in beef replacement heifers points to the earliest stage of retention, but rebuilding remains slow because of high replacement costs, drought risk and limited heifer availability.
Pork producers have benefited from lower feed costs but remain exposed to export concentration and uneven demand. Ahead of grilling season, the retail pork demand index fell to its lowest level since 2020, making exports critical to clear supply. USDA forecasts imply pork production will outpace disappearance by a moderate margin through 2026, a gap that showed up this summer when the cutout missed its normal seasonal rally.
Broiler integrators have the clearest path to volume growth, but only if demand can absorb added production. Chicken remains well positioned on value, convenience and menu flexibility, but quick-service restaurant (QSR) sales gains appear more measured than headline growth suggests.
The US dairy herd grew by 200,000 over the past 12 months, driven by strong producer returns for beef-on-dairy calves. Texas, Idaho, Kansas and South Dakota led the herd expansion as US dairy cow numbers moved to a 34-year high.
Beef-on-dairy calves have dropped from a $2,000 high this May, but the current $1,300 per calf remains far higher than the $200 level that prevailed before 2023. The extra dairy cows and resulting milk supply have put downward pressure on milk cheque revenue. As a result, beef revenue has become the key profit driver at the margin for producers whose milk cheques cover expenses.
